Yes, because of Java's extensible classloading mechanism, all you have to do is drop an war/ear to the 'deploy' folder of your application server. New files are deployed, rewritten files are redeployed and deleted files are undeployed.
if you need more elaborate lifecycle management of components as they are upgraded, then maybe OSGI could do that.
erlang's approach really appeals to me though -- not only does the code get upgraded, but it's in cooperation with its message loop so you don't miss a step, and you also get a callback to migrate your actor state.
One of the beauties of Erlang's hot code loading is the ability to migrate internal application state. An example:
I'm storing a lookup table going from key to value as a tuple {key, value}. With a change going out, I'm going to start doing {key, {value, other-value}}. In Erlang there's an easy pattern in place to do that. Just provide a function that goes from {key, value} to {key, {value, sensible-default}} and as part of the code reloading process that function will be run before the new code starts executing.
That's not at all a perfect explanation of the process, but it's more or less useful enough to describe the difference between the two platforms.